11/16/2016

If Dodd-Frank is repealed, will shareholders use 14a-8 proposal rule to replace key parts?

Shareholders might also put pressure on companies to keep the votes even if Dodd-Frank is repealed. Proxy advisory firms could propose that clients vote against directors at companies without say-on-pay, according to Jon Lukomnik, executive director of the Investor Responsibility Research Center Institute in New York.

“A company that withdraws it is going to make itself a target,” Lukomnik said. “That doesn't mean some won't withdraw it.” He said he expects many companies would keep an annual say-on-pay vote.

I suspect there may be an effort by institutional investors to keep governance provisions like say on pay via the proposal process, just as they used the proposal process to put through shareholder nomination powers via bylaw amendments.